In the News, Press & News

Apple is seceding in a pending healthcare civil war

by Sheila Talton | April 04, 2018

At minimum, Apple’s new clinics represent another giant corporation seceding from a national healthcare system because they think they can do better. (AP Photo/Charles Rex Arbogast)

Do America’s hospitals a favor. If you happen to be on a first name basis with any healthcare executives, ask if they noticed the fleeting news items on Apple setting up its own healthcare system for employees.

At minimum, Apple’s new clinics represent another giant corporation seceding from a national healthcare system because they think they can do better. Or perhaps, in combination with the mysterious troika of Amazon, J.P. Morgan, and Berkshire Hathaway, they have decided to make their move on a vulnerable health system that can’t continue as it is.

The entrance of innovators like Apple and Amazon into the healthcare space has inspired many to wonder how these companies might revolutionize the industry. But Apple’s news this month, that it is developing its own system of health clinics, should raise a more important question: if our biggest corporations create their own health systems, where does that leave the rest of us?

No one needs to ask this question more urgently than hospitals, who should take it as a cue to innovate quickly — racing to be agile enough to revamp their businesses and lead their own healthcare revolution before it’s too late.

Decades ago, hospitals realized they would be far better off outsourcing the management of their real estate, leading to the creation of real estate investment trusts, or REITs. Yet in my experience, many hospital executives and healthcare leaders have been reluctant to look outside their walls for crucial but non-core functions — everything but the actual medical care of the patient.

This is where healthcare leaders need to be disciplined and learn from the nimblest among corporate America. Gone are the days of companies trying to be everything for everyone. Ask any executive at a major public company what they are striving for and they will tell you speed and agility.

Amazon offers an instructive example to healthcare leaders. Its online shopping experience is unrivaled, due largely to a flexible network of partners each with its own specialty. If the partners disappoint customers, Amazon finds new ones. Hospitals need to do the same, bringing in the companies and services who can provide what they need to deliver the best care possible.

Right now, Apple’s boutique health clinics are just an employee perk. But along with Amazon, Berkshire, and JPMorgan, it’s not hard to see how these companies could one day create a parallel network if today’s major care providers fail to adapt – one that results in a new set of haves and have-nots.

It won’t just be the hospitals that suffer if they fail to reorient and focus their business. It will be the majority of Americans who still rely on mainstream healthcare systems, those who work in factories, in the services industry, in retail, for local governments, or in their homes.

Hospitals still enjoy a huge amount of public trust, and almost all of the medical talent and market share, which is part of the problem: there’s a sense of inertia that comes with decades of dominance. Yet the worst thing healthcare executives can do is resist change. They need to embrace a new way of doing business, one that looks more like the Silicon Valley giants knocking at their doors.

Sheila Talton is president and CEO of Gray Matter Analytics and serves on the boards of companies and nonprofits including Deere & Co., Wintrust Financial Corp. and Chicago’s Northwestern Memorial Hospital Foundation.